Litigating In Rem Cybersquatting Cases Under The ACPA – Best Practices And Considerations

Jul 2002 – Article
June 2002 edition of the e-Commerce Law & Strategy Newsletter © 2002 NLP IP Company

The Anti-Cybersquatting Consumer Protection Act ("ACPA"), 15 U.S.C. §§ 1114(2)(D), 1125(d), was enacted into law in November 1999. After just over two and one half years of litigating domain name misappropriation cases under the Act, particularly its in rem provisions [15 U.S.C. § 1125(d)(1)], we may now consider a list of best practices born from practical experience as well as emerging case law.

Ensure That Your Target Cybersquatter Truly Is Foreign

By its very terms, the in rem provisions of the ACPA apply only to foreign defendants over whom in personam jurisdiction cannot be obtained in any court within the United States. 15 U.S.C. § 1125(d)(2)(A)(ii)(I)-(II). Proceeding in rem against a domain name registered by a person or entity later found to be subject to domestic service of process within the United States will result in a dismissal of the lawsuit, Lucent Techs., Inc. v., 95 F. Supp. 2d 528 (E.D. Va. 2000) (Lucent I), forcing the plaintiff to bring a new in personam action against the domain name registrant in the domestic location where the cybersquatter is found. Lucent Techs., Inc. v. Johnson, 2000 U.S. Dist. LEXIS 16002 (C.D. Cal. 2000) (Lucent II). The following methods may be used to determine whether the target domain name registrant truly is foreign:

  • examine the WhoIs database maintained by the domain name registrar;
  • view contact addresses shown on web pages found under the Uniform Resource Locator ("URL") corresponding to the domain name and e-mail contact data;
  • review foreign correspondence received from the domain name holder;
  • perform a reverse look-up of on-line database information corresponding to available telephone numbers for the domain name holder;
  • employ software programs to trace the server corresponding to the Internet Protocol ("IP") address associated with the domain name.

Lock Down The Target Domain Name

If one is not careful, and the cybersquatter is clever, it may be able to transfer registration of the domain name to a registrar located outside of the jurisdiction of the United States. Once this happens, the ability to proceed in rem against the target domain name under the ACPA is lost. The Act provides that prior notice must be given to the cybersquatter before proceeding in rem against the domain name. 15 U.S.C. § 1125(2)(A)(ii)(II)(aa). At least one court has stated that the plaintiff must wait a reasonable period of time after sending the notice before filing the in rem action. See, Lucent I supra, at 532. During this "reasonable" period of time, the putative plaintiff must wait and pray that the sophisticated cybersquatter does not immediately transfer registration of the domain name to a foreign registrar. Once, however, the reasonable period of time has elapsed, and the in rem complaint has been filed, counsel should take immediate steps to lock down the domain name, preventing its transfer to an off-shore registrar. Immediately after filing the in rem Complaint, a copy should be sent to the domestic domain name registrar (e.g., Verisign in Virginia, in Maryland, or in New York) with a request that the domain name be "locked" so that it cannot be transferred elsewhere.

Deposit The Domain Name Into The Registry Of The Court

Domain name registrars want little or nothing to do with court proceedings over domain names they have registered. In fact, a complex set of provisions were enacted under the ACPA to preclude registrar liability where it acts with respect to a domain name pursuant to a court order. 15 U.S.C. §§ 1114(2)(D)(i)-(v). A practice developed by Verisign's predecessor, Network Solutions, Inc. ("NSI"), and now duplicated by many domain name registrars, provides an expeditious method to deposit the contested domain name into the Registry of the court. Upon receipt of the Complaint, the domain name registrar will issue a declaration bearing the caption of the filed civil action:

§ acknowledging that it is the registrar of the contested domain name,

§ stating that the registrar will, by the plaintiff's filing of the declaration, allow the domain name registration to be deposited into the Registry of the court, and

§ stating that the registrar will abide by all orders of the court regarding the disposition of the domain name.

Typically, the registrar's declaration is effective for fourteen (14) days. If the declaration is not filed with the court by that time, the declaration and lock on the domain name expire. Some courts require the filing of a motion for a domain name to be deposited into the court's Registry. Other courts simply accept the filing of the domain name in the court's Registry by the mere filing of the registrar's declaration with a simple Notice of Filing.

Deposit The Domain Name In The Appropriate Court

The ACPA specifically provides that an in rem action may be maintained against the target domain name only "in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located . . . ." 15 U.S.C. § 1125(d)(2)(A). Three courts already have stated expressly that the plaintiff cannot litigate in any forum it chooses simply by depositing the registrar's declaration into the Registry of any court of its choosing. Standing Stone Media, Inc. v., 193 F. Supp. 2d 529 (N.D.N.Y. 2002); Mattel, Inc. v., 58 USPQ2d 1798 (S.D.N.Y. 2001); FleetBoston Fin'l Corp. v., 138 F. Supp. 2d 121 (D. Mass. 2001).

Have A Plan For Post-Filing Notice/Service

After the in rem Complaint is filed, the ACPA contemplates "publishing notice of the action as the court may direct promptly after filing the action." 15 U.S.C. 1125(d)(2)(A)(ii)(II)(bb). At least one plaintiff went the traditional route, choosing personal service on the domain name registrant under his country's local laws. Heathmont A.E. Corp. v., 106 F. Supp. 2d 860 (E.D. Va. 2000). Although the issue was decided in the copyright context, one court recently upheld service of the complaint by e-mail, after other methods of service proved unsuccessful. Rio Props., Inc. v. Rio Int'l Interlink, 284 F.3d 1007 (9th Cir. 2002). The in rem plaintiff may suggest e-mail publication of the notice as a convenient and expeditious alternative to physical publication in a local newspaper.

Prepare To Show The Cybersquatter's Bad Faith

Although one court has stated that in rem cybersquatting claims do not require a showing of bad faith with respect to the registration or use of the domain name, Jack in the Box, Inc. v., 143 F. Supp. 2d 590 (E.D. Va. 2001), at least two courts have said that bad faith must be shown, Cable News Network v., 177 F. Supp. 2d 506 (E.D. Va. 2001); Broadbridge Media, L.L.C. v., 106 F. Supp. 2d 505 (S.D.N.Y. 2000). A prudent course would be to make a showing of bad faith, even in an in rem action, using for example the bad faith factors listed in the ACPA with respect to in personam cybersquatting actions. 15 U.S.C. § 1125(d)(1)(B)(i)(I)-(IX).

Alternatively, Consider Filing a UDRP Proceeding

In October 1999, the Internet Corporation for Assigned Names and Numbers ("ICANN") promulgated its Uniform Dispute Resolution Policy ("UDRP") and accompanying rules, which may be found at ICANN's website, The UDRP proceeding provides for a relatively expeditious administrative proceeding whose remedies, just like an in rem cybersquatting action, are confined to the cancellation or transfer of a domain name. A previous article appearing in this newsletter compared the various aspects and strategies of proceeding with an ACPA action versus a UDRP proceeding. See Felder, Barry G.,How to Protect Trademarks in Domain Name Disputes with Arbitration or Litigation, E-Commerce Law and Strategy, Vol. 18, No. 2 (June 2001). Considering that monetary remedies are not available either in a UDRP proceeding or an in rem ACPA action, the thoughtful practitioner will consider whether simply to bring a UDRP proceeding giving thought to issues such as:

§ the availability of proof of bad faith without the benefit of discovery,

§ the strength of the putative plaintiff's rights,

§ whether the putative defendant will aggressively defend, and (4) where an appeal or challenge to the initial decision will lie. Considerations of this type are beyond the scope of this article.

As our experience with the in rem provisions of the ACPA matures, and the courts issue further decisions, practitioners will refine their practice by making good use of the tools that Congress gave to trademark owners in order to wipe out (or at least to cut down) abusive domain name registration practices. The tips and suggestions provided in this article should prove useful to practitioners in this developing area of the law.

This article is reprinted with permission from the June 2002 edition of the e-Commerce Law & Strategy Newsletter © 2002 NLP IP Company. All rights reserved. Further duplication without permission is prohibited.